Key concepts and terminology in receivables finance and asset-based lending

The following Banking & Finance practice note provides comprehensive and up to date legal information covering:

  • Key concepts and terminology in receivables finance and asset-based lending
  • Parties—terminology
  • Receivables finance and asset-based lending—types of facility and documentation
  • Key terminology in receivables finance and asset-based lending
  • Key legal concepts in receivables finance and asset-based lending
  • Assignment
  • Charge
  • Retention of title (ROT)
  • Rome I and export debts
  • Key cases
  • More...

Key concepts and terminology in receivables finance and asset-based lending

IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marks the end of the Brexit transition/implementation period entered into following the UK’s withdrawal from the EU. At this point in time (referred to in UK law as ‘IP completion day’), key transitional arrangements come to an end and significant changes begin to take effect across the UK’s legal regime. This document contains guidance on subjects impacted by these changes. Before continuing your research, see Practice Note: What does IP completion day mean for lending lawyers? [Archived].

This Practice Note explains the key concepts and terminology used in receivables finance and asset-based lending.

It covers:

  1. the terminology surrounding the key parties in receivables finance and asset-based lending in Parties—terminology

  2. the key types of facility and documentation used in receivables finance and asset-based lending transactions

  3. the key terminology in receivables finance and asset-based lending

  4. the key legal concepts in receivables finance and asset-based lending being assignment, fixed and floating charges, retention of title and cross border issues, and

  5. key cases

Parties—terminology

In the UK, a receivables facility is typically structured as a receivables purchase facility which can either take the form of an invoice discounting facility or a factoring facility (see Practice Note: Invoice discounting and factoring).

It is also possible to provide a loan secured against the value of receivables but

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